LONDON Marriott International has pulled out of the bidding for the Le Meridien hotel brand, according to a Reuters report May 3, leaving Nomura to snatch up the luxury chain from Granada Compass.
After being informed that it was not selected as the preferred bidder, Marriott has withdrawn from discussions, said a Marriott spokesperson who declined to elaborate further.
Nomura International, a unit of Japan s Nomura Securities Co., was named as the preferred bidder earlier this week after bidding nearly #1.85 billion, or $2.65 billion for the chain. Marriott had placed a lesser bid of #1.7 billion, or $2.43 billion for the chain.
It is anticipated that Nomura and Compass will carry on exclusive discussions over the next few weeks with a final deal expected to be signed later this month.
According to analysts, Nomura is in the process of trying to arrange financing and may consider selling and leasing back some properties or issuing bonds backed by the income of the business.
Some analysts said the deal would have made sense for Marriott if the price was right. The purchase would have allowed Marriott to reach its goal of doubling its number of European hotel rooms to nearly 65,000 by 2003. Now that goal may be hard for Marriott to reach. (5/3/01)